Bean Outlook – Ohio Ag Net


By Jon Scheve, Superior Feed Ingredients, LLC

Everyone wants to know how bad bean yields in South America will be. Unfortunately, it is extremely difficult to accurately predict future bean yields. Even in the United States, most farmers I know don’t want to estimate their bean yields until the combine is in the field, let alone a month or two before.

The bean recovery in recent weeks is mainly due to persistent dry weather in the southern third of Brazil and much of Paraguay, which typically produces about 10% of the Brazilian crop size. While crops in both countries have suffered, the extent of yield reductions is still uncertain. Last summer, predictions ran wild about poor American bean yields in the northwest soybean belt. Ultimately, farmers in these areas were surprised that their yields were not as badly affected as originally feared. Likewise, it simply seems too early to accurately estimate final bean yields in South America at this time.

Argentine beans still have a growing season ahead of them, so the weather there could still have a big effect on final yields.

That leaves US bean sourcing as the global “bean backup” plan. If everyone runs out, American beans become much more valuable. In the end, everything will depend on the weather and if someone could accurately predict the long-term weather, they could also predict future prices.

If South America’s crop continues to be reduced, US bean prices will rise. If this happens, it could potentially cause an acreage battle with corn in the spring.

Corn Prospects

Corn prices seem to have stagnated temporarily. Ethanol inventories are extremely high and profits at these plants have fallen significantly in the recent recovery. Additionally, tank car logistics issues also slow the movement of the finished product. For prices to recover, dry weather in Argentina later this month will be needed to help bring export demand back to the United States.

Market Action

On January 25, an open March corn futures sell order at $6.25 that I had in place was met. The order was for 10% of my 2021 production. I am now sold at 60% on my corn from the old harvest.

Please email [email protected] for any questions or to find out more. Jon grew up growing corn and soybeans on a farm near Beatrice, NE. After graduating from the University of Nebraska at Lincoln, he became a grain trader and has been trading corn, soybeans and other grains for 18 years, building relationships with end users in the process. After successfully marketing his father’s grain and earning his MBA 10 years ago, he began helping farmer clients market their grain based on his principles of farmer education, reducing risk, by understanding the storage potential and using a grassroots strategy to maximize profits for individual farms. A strong believer in educating farmers about futures trading, Jon writes a weekly commentary for farmers interested in learning more and growing their farms.

Trading futures, options, swaps and other derivatives is risky and not for everyone. All of these investment products are leveraged and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where the solicitation and sale is legal, and in accordance with the laws and regulations applicable in that jurisdiction. The information provided here should not be considered a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC provides this information for your general information only and the information does not take into account the investment objectives, financial situation or needs of any particular individual. All investors should seek advice based on their particular circumstances before making any investment decision. The content of this communication and any attachments is for informational purposes only and should not be construed as an offer to buy or sell, or a solicitation to buy or sell, any futures, options, swaps or other derivatives. The sources of the information and opinions contained in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its directors and employees may hold positions other than any of the positions described in this communication. Past results are not necessarily indicative of future results.


Comments are closed.